CEE MARKETS-FX stable, most stocks gain as PMI data shows robust recovery
By Anita Komuves BUDAPEST, July 1 (Reuters) - Central European currencies were little changed in thin trading on Thursday, while fresh PMI data from the region showed a robust economic recovery from the pandemic, with Poland and the Czech Republic's readings rising to record highs. Czech manufacturing business sentiment rose to 62.7 in June, its highest since data collection began two decades ago. A reading above 50 indicates an expansion in activity. Hungary's seasonally adjusted PMI rose to 54.7 in June from a revised 53.1 in May. PMI in Poland also rose to a new all-time high of 59.4 in June. "The June PMI reading supports our scenario of raising interest rates (in Poland) at the end of the year," Bank Millennium said in a note. "However, (the likelihood of) no interest rate changes until mid-2022 is also quite high." Despite dovish messages from the Polish central bank, some analysts and traders see a likelihood of policy tightening in Poland earlier than expected after the Hungarian and Czech central banks raised rates last week to fight inflation. However, a lower-than-expected flash CPI estimate on Wednesday cooled Polish rate hike expectations. The Polish central bank holds its next rate-setting meeting next Wednesday. A debate about a rate hike is gathering momentum in Romania as well, Commerzbank wrote in a note. "Will the monetary policy committee remain convinced that the surge in inflation is only temporary? If that were to be the case there is potential for disappointment in RON (Romanian leu) in view of the market's rate fantasies," Commerzbank said. The central bank of Romania also holds its rate-setting meeting next Wednesday. Most stocks in the region gained after two straight sessions of losses. Budapest was up nearly 1%, while Warsaw gained 0.8% and Bucharest rose 0.6%. Prague bucked the trend and lost 0.88%, weighed down by a more than 6% drop in utility CEZ after shares started trading without a right to a dividend. CEE SNAPSHO AT MARKETS T 1037 CET CURRENC IES Latest Previous Daily Change bid close change in 2021 EURCZK= Czech <EURCZK= 25.4800 25.4900 +0.04% +2.94% crown > EURHUF= Hungary <EURHUF= 351.450 351.2400 -0.06% +3.21% forint > 0 EURPLN= Polish <EURPLN= 4.5170 4.5165 -0.01% +0.93% zloty > EURRON= Romania <EURRON= 4.9270 4.9266 -0.01% -1.26% n leu > EURHRK= Croatia <EURHRK= 7.4880 7.4905 +0.03% +0.79% n kuna > EURRSD= Serbian <EURRSD= 117.530 117.6050 +0.06% +0.03% dinar > 0 Note: calculat 1800 daily ed from CET change Latest Previous Daily Change close change in 2021 .PX Prague 1142.75 1152.850 -0.88% +11.26 0 % .BUX Budapes 47695.3 47238.09 +0.97% +13.27 t 1 % .WIG20 Warsaw 2235.97 2218.41 +0.79% +12.70 % .BETI Buchare 11944.5 11873.03 +0.60% +21.81 st 0 % .SBITOP Ljublja <.SBITOP 1126.54 1126.37 +0.02% +25.05 na > % .CRBEX Zagreb 1964.86 1980.49 -0.79% +12.97 % .BELEX1 Belgrad <.BELEX1 771.93 779.45 -0.96% +3.12% 5 e 5> .SOFIX Sofia 555.80 557.69 -0.34% +24.19 % Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republi c CZ2YT=R <CZ2YT=R 0.4270 -0.0470 +108bp -5bps R 2-year R> s CZ5YT=R <CZ5YT=R 1.6760 -0.0740 +225bp -9bps R 5-year R> s CZ10YT= <CZ10YT= 1.8410 0.0110 +203bp +0bps RR 10-year RR> s Poland PL2YT=R <PL2YT=R 0.3950 0.0020 +105bp +0bps R 2-year R> s PL5YT=R <PL5YT=R 1.2740 -0.0020 +185bp -1bps R 5-year R> s PL10YT= <PL10YT= 1.6510 0.0010 +184bp -1bps RR 10-year RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech 1.03 1.33 1.59 0.66 Rep <PRIBOR= > Hungary 1.50 1.85 2.01 1.05 Poland 0.30 0.52 0.72 0.21 Note: are for FRA ask quotes prices ************************************ ************************** (Additional reporting by Jason Hovet in Prague and Agnieszka Barteczko in Warsaw; Editing by Shounak Dasgupta)
